I still feel that the Dow Industrials remain the strongest of the
market indexes on a broader scale. True, there are only 30
stocks in this index, but it does represent a diverse group of
industry giants. As such, this is then an index that traders
should still monitor and try to determine a trading pattern by
which they look to implement trading strategies as it relates to
individual stocks they're trading. If we truly believe (and I
do) that most stocks will trade with the broader market, then
perhaps what we can read into a chart of the Dow Industrials goes
hand in hand with what we've talked about recently in the NASDAQ-
100 (NDX) and other market indexes.

Dow Industrials - $50 box

Looking back on the Dow Industrials and then looking forward with
past bullish counts and current bearish count may give us
insight to what we expect from this index and perhaps the
markets. Late last week I was looking for a 150 point reversal
in the NASDAQ-100 from the 1,700 level in the near-term and we
might also expect the same type of reversal to take place in the
Dow Industrials. Currently the bearish vertical count indicates
a bearish price objective of 10,400 and would put the INDU just
above its long-term bullish support trend. This 10,400 level
also coincides with a nice pullback the Dow Industrials had in
mid-April. I could easily envision a reversal higher to the
10,800 level before a reversal back low and a test of the 10,400
level. At that point, a trader might be looking to get long some
Dow Diamonds (DIA) with a stop at 10,300 then targeting the
recent highs for an extended move higher.